McCracken County is considering putting CASA and other nonprofit groups that receive local government grants “on notice” as the county grapples with ever-tightening purse strings.
The Associated Press reported last month the county is expected to have an $890,000 budget shortfall this year, following the first reading of its proposed 2019-20 budget. The AP cites a Paducah Sun article that says Deputy Judge-Executive Steve Doolittle proposed a five percent reduction in the budget of nearly $30 million.
Budget Workshop
In a budget workshop this week, Commissioner Bill Bartleman disputed the dire financial picture from May, pointing to an end-of-May general fund cash balance of $3.5 million. The total cash balance, he said, is $5.2 million, which includes the transient room tax and bond money. Expenses through the end of May were at 84%. The total budget is $31.8 million. At the end of May, the county had spent $26.2 million. “So that means we have $5.4 million dollars under budget… as of May 31,” he said. June is the last month of the fiscal year and expenditures and revenues for that month are unknown at this time. Much of the remaining amount would involve set-expenses, such as payroll.
“I know we have a tight budget, but I’m not sure it’s nearly as bad as what it’s been portrayed,” Bartleman said, noting that ongoing-recurring expenses have met budget or been under budget. The reserve account was depleted, he said, due to building construction, renovations to the courthouse and jail. “How do we have an $800,000 dollar deficit when we’re already under budget this time?” Bartleman asked.
Doolittle explained that the budget is $1.8 million short of predicted collections. He said recent audits from the state indicated the county deficit spent. “In fact, looking back through the previous seven audits, the county has deficit spent every single one of those years,” he said. While some of that deficit is non-recurring, the issue is that each year, the budget has spent more than it takes in. “Almost year we have one of those large, non-recurring large capital expense things that we need to do. That happens every year. While individually it’s not recurring, every year it’s a road, it’s a chiller, it’s jail locks, it’s some project that happens almost every year, here,” he said.
Doolittle said while it’s possible that the county may end up in a better position than projected, he recommended waiting until after the budget is adopted and June is closed before making any upward adjustments. “And we can do that if revenue is better than we are projecting or if expenses are lower than we are projecting for the month of June,” he said.
The Fiscal Court is scheduled to meet on June 24 to pass the budget.
"On Notice"
In a follow-up email to WKMS News, Doolittle explained that in the current fiscal year, the court provided $683,466 to 16 different agencies, associations and groups. Next year’s budget has $841,000 in requests from 18 groups. The budget introduced in May has $516,466 supporting those groups. He said the Fiscal Court has not yet decided how it will divide up the funds or whether it will restore all, or some, of the funding. He said those decisions are expected to come sometime after July 1.
“The county certainly recognizes the good work the various agencies perform, but like all public agencies in KY, McCracken County is experiencing steep and unsustainable increases in its pension funding,” Doolittle wrote.
The 12% annual pension rate increase is an uncontrollable figure, he said in the workshop, that would require “new dollars” each year. Doolittle estimated that in three years, that would amount to around $1.9 million more than current spending.
“I think you are a couple of years away from being in serious trouble where the only option you will have left is to do something drastic,” Doolittle told commissioners. “I do not believe you are in a strong financial position. I think you’re okay for another year or two at the most. But the way we’ve been doing it we will not be able to do it going forward.”
In the budget workshop, commissioners specifically mentioned funding for CASA (Court Appointed Special Advocates) as an area of concern in the budget. CASA of McCracken County is a program area within Child Watch and advocates for children in abuse and neglect cases. Commissioners suggested putting this organization and others “on notice” with regard to county funding due to financial pressures.
Commissioner Jeff Parker said, “If we are at or a little better than what’s he’s projecting. I think we need - any of these things we’ve cut are cut way back. I’d like to see us try to - if we can cut them, but don’t cut them all the way out. Including CASA and some of these things like that. But put them on notice that we’re in a tight squeeze. Even if we are eight or ten percent better off, we’re still in a tight squeeze. So, put them on notice that, hey, a year from now you might not get anything unless we see some things turn around.”
Child Watch administrative manager Stephanie Steele says CASA is one of their program areas (they also provide therapy and education programs). CASA receives about $45,000 a year from the county, which is about 30% of the program area’s budget. The rest of the funding comes from other grants and fundraisers.
“If we are cut totally, it would be a tremendous hardship for us,” Steele said in the Fiscal Court meeting on Monday that followed the budget workshop. CASA had asked to speak at the meeting.
In the workshop, Doolittle suggested after closing out the month of June beginning an audit process and if the county decides there is more cash in the budget then they’ll come up with a number with regard to what can be put back into the budget.
Bartleman said the budget is currently “mean and lean” and said it needs to be “meaner and leaner.” He agreed with Parker that some organizations need to be put on notice that their funds could be cut over the next year or so. With regard to CASA, he said he did not want to see their mission curtailed.
Bartleman pointed to a Child Watch 990 form and said they had “a pretty substantial balance” in their account. He said the organization had a cash balance of $451,000 in 2016 and that increased to $510,000 in 2017. “That increased by $60,000 dollars which is more than the $45,000 we give them. So, it seems to me they could afford to absorb some or all of that.”
Judge-Executive Craig Clymer said in the Fiscal Court meeting that “the county is not the court system” and suggested the organization ask the City of Paducah for funding. Child Watch Executive Director Janie Criner said in a follow-up interview this has been tried in the past, but the outcome is the same with regard to government resources: the money just isn’t there.
Criner said the majority of Child Watch’s income is designated grant funding, stipulated for three different programs. She said it’s not income that the organization can “just spend however we like.” The funds that Bartleman pointed out, she said, are grant funds and donations. She said when looking at expenses, by the end of June 2018, there was only $78,000 in reserves. She explained this would cover less than two months of operating expenses and that taking money out of reserves puts programming and staff in jeopardy. She also noted that the reserves are something she has worked to build since joining Child Watch and best practices call for four to six months of reserves.
“I really understand the budget crisis that Fiscal Court is facing and I appreciate the consideration that they’re giving to the use of taxpayer dollars,” said Criner. “But I also need to make it known that the $45,000 dollar funding that we have received for 11 years now - it started at $38,000 it’s up to $45,000 - is a big part of our budget and it does make a difference to the services we provide to McCracken County children in Family Court.”
When asked about being put “on notice” with regard to future funding, she said, “A year’s notice is much more doable than a week especially in the grant world.” When asked what Child Watch would do while waiting to hear back from the county whether CASA’s funding is restored, she said they’d dip into those limited reserves to keep services going. “We’re not going to diminish our services. We served over 100 children last year. There are 300 more that need our services,” she said, pointing to a need to increase services.
